OSLO Norwegian oil and gas producer Statoil ASA said its filling station network IPO would raise up to $844 million as it joined a growing rush of companies pushing flotations to cash in on recent stock market strength.
Statoil said on Thursday it will sell up to 40 percent in Statoil Fuel & Retail (SFR) later this month, the first IPO of this size on the oil stock-heavy Oslo bourse since the onset of the financial crisis.
"This transaction provides SFR with a strong platform for further growth and development, taking into account its leadership positions in its key markets, its attractive asset base and its strong brand," Chief Executive Helge Lund said.
SFR has about 2,300 retail stations across Scandinavia, where it has a third of the market, as well as in the Baltics, Poland and Russia. It serves a million customers a day.
Oil companies spend billions to find and develop new fields and have in past years lost interest in hands-on management of lower margin downstream assets such as filling station networks.
BP sold its U.S. retail network in 2007 and Exxon Mobil
began doing the same a year later. Shell has also agreed to sell retail networks in some countries.
SFR's IPO is set to precede a larger listing in Oslo by Norwegian insurer Gjensidige and is further evidence of a pickup in equity listings worldwide.
"The Oslo bourse is near 2010 highs and oil prices are holding above $80 (per barrel), so it's a good atmosphere now for an IPO," said Trond Omdal, an analyst at Arctic Securities.
DIVIDEND AND GROWTH
Book-building for the IPO starts on October 8 and the pricing of the transaction was expected around October 21. SFR will list on the Oslo bourse around October 22, Statoil said.
The shares will be offered for sale at between 32 and 41 crowns per share, meaning the IPO is expected to raise between 3.84 billion crowns ($655 million) and 4.92 billion, excluding an overallotment option of up to 15 percent of the base deal.
Omdal said SFR's price was in line with expectations at below 10 times core earnings (EBITDA).
SFR said it sought to pay out 50 percent of its net profit as dividends and its balance sheet was strong enough to finance its growth plans, which includes building about 30 filling stations per year in Poland and five to 10 in Russia.
It aims to grow organically as well as through M&A.
"We are watching and want to participate," SFR Chief Executive Jacob Schram told Reuters about M&A. "We haven't actively approached (anyone regarding M&A) ... but we are always open to restructuring opportunities."
Shares in Statoil were off 0.7 percent at 127 crowns at 0854 GMT, in line with the Oslo market.
ABG Sundal Collier and Citigroup Global Markets are joint global co-ordinators and, together with BofA Merrill Lynch, act as joint book-runners. Nordea Markets is acting as senior lead manager and retail coordinator, while Barclays Capital and Carnegie are co-lead managers.
(Additional reporting by Joachim Dagenborg; Editing by David Cowell and David Holmes)
($1 = 5.861 Norwegian crowns)